Administration, Termination, and CloseOut of Contingency Contracts

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Administration, Termination, and Close-Out of
Contingency Contracts

• CON 234

Contingency Contracting
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Lesson Objectives

• Describe the responsibilities of the personnel
  involved in contingency contract administration
  and the training each requires to adequately
  perform contract administration functions.
• 2. Compare and contrast the types of contract
  modifications which are used in contingency
  contracting and their affect on timely
  performance.

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Lesson Objectives

• Explain the procedures used to transfer open
  contracts and orders to other contracting offices
  and agencies.
• 4. Explain the typical sources of unauthorized
  commitments and undefinitized actions, and
  demonstrate the proper procedures for
  ratification and definitization.

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Lesson Objectives

• Discuss the typical reasons for contractor
  submission of claims and the difficulties
  associated with obtaining sufficient
  documentation for negotiation and settlement of
  modifications, claims, and disputes.
• 6. Assess a disputed contract claim and develop
  a position to resolve the claim.

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Lesson Objectives

• Discuss the mechanisms and procedures used in
  monitoring contracting personnel and maintaining
  adequate and required documentation of
  contracting actions.
• 8. Explain and demonstrate how to close out
  contracts, purchase orders, and other contractual
  instruments.

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Lesson Objectives

• Discuss and apply judgmental, ethical, and
  environmental considerations in terminating and
  closing out contracts.
• 10. Discuss procedures for administering and
  closing out contingency contracts.

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Administrative Duties CCO

• Requirements of FAR 42.302
• Ratifying unauthorized commitments
• Definitizing unpriced actions
• Negotiating contract modifications
• Monitoring contracting support personnel

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Administrative Duties Support Personnel

• Ordering Officer
• Maintaining SF 44s and submitting monthly summary
  report
• Maintaining record of purchases
• Maintaining record of available funds
• Paying Agent
• Strict accounting of funds
• Register of transactions

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Administrative Duties Support Personnel

• Imprest Fund Cashiers
• Running balance sheet
• Maintain files of forms documenting expenditure
  and receipt of funds
• CORs and QAEs
• Ensure contractor compliance with terms of
  contract
• Document conformance
  and/or nonconformance

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Contract ModificationsFAR 43.101 Definitions

• Bilateral Actions
• Supplemental Agreement
• Definitization
• Unilateral Actions
• Administrative Change
• Change Order
• Termination Notice

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Definitized vs Undefinitized Mods

• Forward priced bilateral agreement is preferred
• Urgency and uncertainty of requirements does not
  always allow
• DFARS 217.74 provides policy guidance for
  definitizing

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Definitizing Unpriced Actions

• DFARS 217.74 requirements apply when purchase
  price exceeds SAT
• HCA approval required prior to entering into an
  unpriced contract action (UCA)
• Establish not-to-exceed amount when entering UCA
• Must definitize before expending 50 of NTE
  amount

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Out of Scope Modifications

• Loosely-worded contract does not mean more items
  can be considered within the general scope of
  the contract
• Arise due to fluctuating requirements
• Not allowed unless they are bilateral
• Require Justification
• Approval
• Typically require approval above
• CCO level - based on dollar
• value

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Practical Exercise

• Out-Of-Scope Modification

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Ratifying Unauthorized Commitments

• Actions by government personnel can result in a
  constructive change
• Directing particular method of performance
• Late or defective GFE/GFM
• Requiring higher quality than specified
• Failure to approve time extensions
• FAR 1.602-3 policy and limitations
• Nonratifiable commitments require submission of
  claim for GAO review

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Practical Exercise

• Ratification of
• Unauthorized Commitment

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Transfer of Contracts

• Required because of
• Redeployment / follow-on
• Transfer of mission
• DCMA assignment
• T4C and new award vs transfer
• Account for Govt and KTR property
• FAR 42.202 Transfer by Letter of Delegation /
  issue a unilateral mod
• Consider the business environment

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Practical Exercise

• Transfer Of
• Contract Administration

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Termination Judgmental Considerations

• FAR 49 provides policy and procedures
• Consider cultural, political, and business
  practice differences
• Transition from non-hostile to hostile environment

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Termination of Commercial Contracts

• Termination for Convenience
• Favors the Contractor when compared to a FAR Part
  49 T4C
• Termination for Cause
• Favors the Government when compared to FAR Part
  49.4 T4D
• Practical Implications for the CCO

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Ethical ConsiderationsClose-outs and
Terminations

• Command pressure to quickly reduce footprint
  and send troops home
• Fair and just versus legally sufficient
• Clean up after yourself
• Gifts and gratuities upon departure

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Environmental Considerations

• Proper disposal of hazardous materials
• Compliance with local / OCONUS requirements
• Expectation of compliance with CONUS requirements

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Practical Exercise

• Termination And Settlement

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Contract Claims

• Definition - FAR 33.201
• Contingencies are ripe with conditions which
  increase the likelihood of claims
• Constructive changes
• Rapid acquisition procedures
• Lack of sufficient documentation
• Differing business practices
• Wide variance between anticipated and actual
  requirements

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Non-Contract Claims

• Personnel Claims Act (31 USC 3721)
• Military Claims Act (10 USC 2733)
• Foreign Claims Act (10 USC 2734)
• SOFA Claims
• UCMJ Article 139 Claims (10 USC 939)
• Combat Claims
• Requisitions under the International Law of War

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Settlement of Claims

• Establishing negotiation position
• Documentation and record keeping
• Monitoring contractors and CORs
• Cost accounting principles often much more lax
  than found in the US
• FAR 33.2 policy and authority
• Expect to face difficulty obtaining sufficient
  documentation

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Record Keeping

• Basic requirements spelled out in FAR 4.8 and
  DFARS 204.8
• JAs and DFs
• Modifications and claims
• Cost data
• Documentation of performance
• Transfers and terminations
• FAR 4.804
• DFARS 204.804

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Closeout Requirements Beyond Contract Files

• Ordering officer accounts
• Original appointment order
• Completed forms, documents, reports
• PIIN logs
• Unused forms
• Coordinate with J-1/AG - ensure ordering
  officers, imprest fund cashiers, CORs
• do not leave theater without CCO
• clearance

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Practical Exercise

• Contract Closeout

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After Action Reports

• JULLS reports will be required both during and
  after the operation
• AARs will be required at the conclusion of the
  operation
• The end of the contingency is not the time to
  begin preparing these documents

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Summary

• Initiation and award of contracts meets time
  demands, but proper contract administration
  satisfies customers
• Extensive effort required to administer and
  closeout contracts properly
• Consider issues requiring judgment, cultural,
  ethical, and environmental issues ensures smooth
  flow from award to closeout

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